Certified Management Accountant (CMA)

Certified Management Accountant (CMA) is an accounting designation that signifies expertise in financial accounting and strategic management. This certification builds on financial accounting proficiency by adding management skills that aid in making strategic business decisions based on financial data. The Certified Management Accountant certification requires a college degree; the Institute of Management Accountants (IMA) issues the CMA certification.

Accountants are required to get a bachelor’s degree and have no less than two years of work experience, of which two years must be in management accounting. CMAs have an extensive range of career options. They can move into executive positions such as vice president of finance, controller, chief financial officer or chief executive officer. CMAs can specialize in many roles such as staff accountant, cost accountant, corporate accountant, internal auditor, tax accountant, financial analyst or budget analyst. Unlike the CPA certification, the CMA certification is voluntary.

CMAs are subject to a code of ethics. The Freddie Mac scandal in 2003 is an example of management accountants not adhering to a code of ethics. Company executives and management accountants deliberately understated company profit. They also illegally used company resources for fundraisers for federal candidates to influence decisions about Freddie Mac. The actions were illegal and unethical and violated the CMA code of ethics.

Candidates should plan to study for 150-170 hours per part to prepare for the two-part CMA exam. Candidates are allocated four hours to complete the 100 questions and two essay questions in each part. 

Part 1 covers financial reporting, planning, performance and control. It includes the following sections:

• External Financial Reporting Decisions: 15%
• Planning, Budgeting, and Forecasting: 30%
• Performance Management: 20%
• Cost Management: 20%
• Internal Controls: 15%

Part 2 covers financial decision making and includes the following sections:

• Financial Statement Analysis: 25%
• Corporate Finance: 20%
• Decision Analysis: 20%
• Risk Management: 10%
• Investment Decisions: 15%
• Professional Ethics: 10%

Live and virtual classrooms are available to candidates, as are retired exam questions and glossary terms. For more, see the IMA's CMA Exam informational page and the CMA Handbook.

The Industrial Revolution prompted the need for superior cost accounting systems. The railroad industry influenced the accounting sector with financial statements, cost estimates, reports and other metrics to help companies make informed decisions. The evolution of the railroad industry and the rapid growth of financial institutions shifted the focus of managerial accounting to include functions other than cost accounting such as human resource accounting.

During the Industrial Revolution through the middle 1900s, corporations made huge investments in natural resources, factories and equipment that resulted in the need for cost accounting. In addition, management accounting was used as cost accounting. After World War II, management accounting education was formalized when it was introduced into the curriculum of Master of Business Administration students at MIT and Harvard University. From the 1950s to the 1980s, the focus of the accounting industry shifted to providing information for management control and planning.

The hiring of accountants is projected to grow 11% from 2014 to 2024. Business and process changes are expected to continue to shape the management accounting sector. Due to the absence of standardization, growth is expected to continue in the management accounting sector because companies have considerable freedom in designing management accounting systems. Management accounting designs and processes vary significantly by company. Additional factors that contribute to an increased demand for management accountants include staffing needs, a healthy economy, advanced business platforms and globalization of businesses.